The long-awaited MP936

Yesterday, April 1, 2020, the Government enacted Executive Order no. 936 to implement the Emergency Employment and Income Preservation Benefit (Emergency Benefit) to guarantee employee jobs and income and also regulate additional labor measures for dealing with the state of public calamity and international public health emergency due to the coronavirus (COVID-19).

The purpose of the Executive Order is to preserve employment and income; guarantee continued of labor and business activities; and reduce the social impact of the public health emergency.

In this sense, the Emergency Benefit to preserve employment and income was created. The Benefit will be regulated and paid by the Ministry of Economy with the potential to reduce salaries and work schedules and temporarily suspend labor agreements.

With regards to the salary reduction, this may be negotiated between the employee and employer by individual written agreement, for up to 90 days, provided that some of the criteria established in the Executive Order are met.

A temporary suspension of the labor agreement may also be negotiated between the parties by individual written agreement, up to 60 days, which may be divided into 2 periods of 30 days.

An important aspect of both measures is the recognition of the provisional guarantee of the employee who receives the Emergency Benefit to preserve employment and income during the agreed period (of salary reduction or labor agreement suspension), and, after the restoration of the original conditions of the agreement for an equivalent period of the reduction or suspension.

The employment guarantee is not guaranteed in the event of resignation or termination with cause.

The measures to reduce working hours and salary and the temporary contractual suspension referred to in Executive Order # 936/20 may also be negotiated collectively, including with percentages that differ from those provided for in Executive Order # 936/20.